The IBD Stock Screener quickly scans thousands of stocks to identify those with great fundamentals and bullish charts. Today's screen highlights stocks that mutual funds are buying, including Amazon.com, Broadcom and Eli Lilly. Amazon stock is climbing back to a recent high.
Both Amazon and Eli Lilly passed their earnings hurdles on April 30, while Broadcom won't report until around mid-May.
Amazon Stock Is A Mutual Fund Favorite — Here's Why
Mutual funds own 40% of the 10.4 billion shares outstanding in Amazon stock. In March, a hefty 7,538 funds owned shares, up from 7,385 in December and 7,211 in September. Eight of the IBD Mutual Fund Index names hold Amazon stock, including American Century Focused Dynamic Growth Fund, Fidelity Contrafund and MFS Growth Fund.
Amazon stock is extended from a cuplike base with a 145.86 buy point. Shares reached a 52-week high of 187.77 on April 11. The Magnificent Seven stock has gained around 23% this year thus far.
Amazon beat first-quarter earnings and sales estimates late April 30. First-quarter profit grew a robust 216%, making it four straight quarters of dynamic growth. Its Amazon Web Services cloud-computing division grew 17% and topped views.
Analysts polled by FactSet expect second-quarter earnings of $1.19 a share, or 83% growth, with a 38% and 51% increase in the following two quarters.
Quarterly revenue growth has been in the 11% to 14% range for the last four periods. Sales are projected to grow in the 10% to 11% range over the next four quarters. Full-year estimates call for profit growth of 74% in 2024 and 25% in 2025.
Amazon stock holds a 94 Investor's Business Daily Composite Rating and an 81 EPS Rating, as its calculation includes the 2022 loss.
Broadcom Stock Tests Key Level
Broadcom stock also earned its place as a large-cap growth stock in the IBD Big Cap 20. Mutual funds own 49% of the 463 million shares outstanding. In March, 4,909 funds owned the stock, up from 4,869 in December and 4,524 in September.
The stock plunged 7% in heavy volume following the company's better-than-expected fiscal first-quarter earnings and revenue on March 7, with the company's fiscal 2024 revenue outlook reiterated at $50 billion.
Shares continued to drop and undercut their 50-day moving average in an undefined base with a 1,438.17 buy point. The entry point is also its all-time high reached on March 4. The stock traded around the 50-day line in the base and gained around 2% on Monday. It tested the 50-day line as resistance.
Broadcom's first-quarter earnings grew 6% on 34% sales growth. Further, analysts see an 18% decrease in fiscal second-quarter earnings on 38% revenue growth, according to FactSet estimates. Broadcom designs, develops and manufactures semiconductor and infrastructure software products for data centers and networking, software, wireless and storage markets.
Mutual Funds Add Eli Lilly Stock
In addition to Broadcom and Amazon stock, Eli Lilly stands as one of the "Leaders Near A Buy Point" on IBD's Leaderboard. Mutual funds hold 40% of the 950 million shares outstanding. Fund managers increased holdings of the drug stock, with 5,077 owning shares in March, picking up from 4,994 in December and 4,811 in September.
The drug stock is in a double-bottom base with a 793.67 buy point. Shares reached a record high on March 4, and have gained around 31% in 2024 thus far.
Eli Lilly reported higher-than-expected first-quarter profit but missed sales projections on April 30. But it topped sales estimates for its weight-loss drug Zepbound. Earnings popped 59% over the prior year's quarter while total sales grew 26%. FactSet estimates call for 112% per-share earnings growth this fiscal year and 39% in fiscal 2025.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
